Markets Next Week: Economic Data To Decide Momentum

The Nifty and the Sensex, both shed 1.48 per cent this week, as investors continued to sell into banking stocks like ICICI Bank.

It was not a great week for select stocks like Adani Ports, which shed as much as 20 per cent on plans to raise additional capital.

ICICI Bank also had a bad week and has consistently shed ground since declaring its quarterly numbers. Analysts believe that at the moment there are lack of triggers for the market. There has been very little participation from retail investors and FII and domestic net buy/sale figures are virtually flat.

The US non farm payroll data, which was released on Friday pointed to lower than expected job creation. This led to a decline in the US Markets and this may have some sentimental impact on Monday.

Next week there would be a few things that the markets would watch. One is to see if there is any progress being made on the passage of the Goods and Services Tax. The passage of the Bill has been postponed so many times in the past, no analyst is now talking of it any longer. It looks doubtful, if the Bill would be passed this year again in the Rajya Sabha.

Reforms have also taken a backseat and we hardly hear of anything concrete being announced. Key to market movement next week would be retail inflation and the IIP data. If retail inflation edges up, the RBI may hold interest rates steady in its next policy meet. IIP data may once again come flat.

In results, Cognizant reported numbers that lagged estimates on most counts. Though the company is not listed in India, its results are a good indication of how the sector spends are happening. There may be a slight impact to IT stocks following the results.

All in all, expect another lackluster week for the markets. However, select stocks may react to their results and hence maybe very volatile. Watch out for banking stocks, which maybe volatile ahead of retail inflation data.